WASHINGTON– A new report has been released that identifies what it says are the top 20 U.S. banks most dependent on junk fees and which disproportionately target lower-income consumers through their branch locations.
According to Accountable.US, nearly 60% of these banks’ 4,200+ branches are set up in counties with poverty rates at or higher than the national poverty rate, while more than 76% of their branches were in counties with median household income levels less than the national median household income, the organization said.
“These banks reported on average 41.7% of their 2021 net incomes from service charges that punish vulnerable consumers,” stated Accountable.US, which describes itself as a “nonpartisan organization that shines a light on corporations and special interests that too often wield unchecked power and influence in Washington and beyond.”
‘Nickel & Diming’
“Make no mistake: these twenty banks would still be profitable without nickel and diming low-income families under this exploitative ‘junk fee’ practice,” said Accountable.US Director of Economic Security and Corporate Power Liz Zelnick in a statement. “Our research demonstrates an intentional and predatory practice of setting up in low-income communities and charging exorbitant fees. Meanwhile, billions of dollars are being siphoned from the economy, money that could be otherwise spent on goods and services to create jobs rather than pad the bottom line of greedy banks. The Biden administration’s first major step towards junking junk fees is a win-win for working families and the economy.”
Accountable.US said that among the banks profiled in its review is Regions Bank, which was recently ordered by the CFPB to pay $191 million for “illegal surprise overdraft fees.” As CUToday.info reported, the CFPB called the bank a “repeat offender.”
Accountable.US said it found Regions Bank had almost half of its branches in lower-income counties and made 26% of its net income from junk fees in 2021.
‘Desperate to Spin’
“The financial industry has been desperate to spin abusive and excessive junk fees as a necessary fact of life that somehow ‘saves consumers money.’ The reality is that overdraft programs cost consumers billions each year and heavily benefit banks and their shareholders,” the organization said. “Meanwhile, as the Biden administration and CFPB are ramping up actions to curb and refund overdraft fees, big business groups, like the U.S. Chamber of Commerce, have been frantically trying to weaken the agency’s rulemaking power by filing a lawsuit to reverse its new crackdown on discriminatory practices.”
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